By Clancy Yeates

Australia's approach to carbon emissions is making some international investors increasingly "reserved" towards the country, says the local head of French banking giant BNP Paribas.

With European banks increasingly focused on the carbon exposure of their loan books, BNP chief executive Australia and New Zealand Didier Mahout also said there was room for improvement in how seriously corporate social responsibility issues were taken in Australia.

Overseas investors are concerned about Australia's approach to carbon emissions and corporate social responsibility.Credit:Paul Jones

Ahead of climate talks in Paris later this year, Mr Mahout said international investors were starting to become more concerned about Australia's approach to carbon emissions and corporate social responsibility issues relating to the environment.

While this has not prevented investment occurring, he said it was a bigger concern among overseas investors than local ones.

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"It makes some international investors more reserved about coming to Australia under those circumstances," he told journalists in Sydney.

"There is no crisis, no urgency, just the need to become aware of that," he said.

BNP is France's biggest listed bank and serves institutional clients in Australia. It has $2.2 billion in gross loans and advances in Australia, according to latest figures from the financial regulator.

Paris will this year host a United Nations Climate Conference, where world leaders will attempt to nut out a global deal to reduce carbon emissions. This could put pressure on Australia to revisit its carbon policies.

Aside from policies on carbon, some big overseas financial institutions are also becoming more concerned with the reputational and business risks of some large resources projects such as those in the coal industry.

For instance, Deutsche Bank last year said it would not consider funding the expansion of the Abbott Point coal terminal on the Great Barrier Reef.

"You know where I hear most of the Great Barrier Reef, and the projects in Queensland? Not in Australia, in Europe," Mr Mahout said.

"Every responsible leading organisation worldwide wants to be seen as an organisation that is totally aligned with CSR principles at the way they are doing business."

He said that when he came back to Australia it was clear there was "some way to go" in terms of taking environmental and corporate responsibility issues seriously.

Australian banks are facing increasing shareholder concern over their potential carbon exposure, with ANZ and CBA shareholders last year voting on resolutions from the Australasian Centre for Corporate Responsibility that would have required banks to disclose their "financed emissions".

These resolutions were firmly rejected by shareholders, but big investors including Australian Super say the issue of carbon exposure has been raised directly with the chairmen of the big banks.